The New Worker
The Weekly paper of the New Communist Party of Britain
Week commencing 24th August 2012
THE UTTER incompetence of Prime Minister David Cameron and his Chancellor George Osborne in managing Britain’s finances was confirmed last week with the news that the Government had been forced to increase Government borrowing by £600 million in July.
The reason for the “unexpected” need to borrow was a fall in tax revenues.
When it came to power in May 2010, the Con-Dem Coalition prioritised reducing Government debt over every other policy and since then has sacrificed millions of jobs along with public services.
Almost every household in Britain has seen living standards fall to some extent but the most vulnerable, the long-term sick and disabled have suffered the greatest cuts.
Now we have the proof that not only do these painful measures fail to improve the Government’s debt problems; they make it worse.
Time and again the Government has been warned — by the unions, by the International Monetary Fund, even by the American government — that the cuts have been too deep and have choked off all the opportunities for recovery.
Everyone but the Con-Dem Coalition can see that cutting wages and throwing people out of work and out of their homes means they will not be able to pay very much tax and are more likely to need benefits.
Furthermore, the Government is complaining about a fall in corporation tax revenue — after cutting the rate of this tax. Tory, Labour and this Coalition government have steadily reduced corporation tax over the last two decades to a fraction of what it was — and still big businesses complain. But they also have good accountants and many ways of getting out of paying it.
Some analysts suggest the government could end up borrowing about £30 billion more than last year, when official forecasts had suggested borrowing would fall this year.
Other say the consensus view now is that the Government will be forced to borrow a cumulative £73.9 billion more than it currently expects over the next four years — almost £75 billion of additional borrowing to pay the price for the Government’s total economic failure.
The failure of the Con-Dem economic policy is alarming some leading Liberal Democrats. Lord Oakeshott of Seagrove Bay, the former Lib Dem Treasury spokesperson who last month dubbed Osborne the "work experience" chancellor, said: "How much more evidence do we need that boy soldiers firing pop guns at our recession won't work?
“Now we need two big bazookas — making the banks lend, with RBS nationalised, and building 100,000 more houses a year, led by desperately needed social house building."
Len McCluskey, general secretary of the giant union Unite, said: “With each report on the state of Britain's economy comes more evidence that Tory austerity is failing disastrously and there are real questions about the competence of this Government.
"Instead of growing the economy in the summer months, George Osborne actually plunged the country £600 million more into the red in July.
"This fiscal bungling is now dangerous. The City must accept what the rest of us have said all along — this Government is hurting but it is not working. It must change course before it does irreversible damage to the economy and the hopes of this nation."
And Unison general secretary Dave Prentis said: “It beggars belief that this Tory-led government persists with a cuts and austerity agenda that is patently not working and is doing far more harm than good.
“This increase in borrowing and declining tax receipts is more evidence that the cuts agenda is the wrong way to go about solving the UK’s economic woes, the stagnating economy is moving the Coalition even further away from its deficit reduction plans.
“The government needs to wake up fast to the fact that we need a Plan B for real economic growth; that means creating jobs and investing in the public sector to get the economy going once more.”
The problem is that though they have no idea about economics, Cameron and Osborne are firmly committed to a course of more and more cuts for ideological reasons. They are extreme capitalist fundamentalists who believe that no one should have anything without paying and that maximum profits should be made out of everything that happens.
They are totally opposed to all working class interests and want to reduce us to paupers and slaves in order to increase their own wealth and that of their tiny clique of super-rich friends.